Heard during November last year, businessman Phil Davison-Sebry filed a claim for negligence and breach of statutory duty against Companies House, which acts as the UK's registrar of companies and is an executive agency and trading fund of the government.
A well-respected and substantial business
The mistake led to the firm – which employed 250 people – going into administration.
The case assessed whether there was a duty of care in negligence owed by the registrar to a trading company to 'exercise reasonable skill and care not to enter falsely in the register that it had gone into liquidation'.
Justice Edis said that '....balancing the harm actually done to the company in this case against the potential adverse impact upon Companies House it is clear that the balance favours the loss falling on Companies House rather than the company.'
'To say that it was also owed to every other company on the Register is only to say that a hospital owes a duty to each patient which it treats, and may come to owe duties to many thousands of people in the course of a year. That is of course true, but not a reason for denying that the hospital ever owes any duty.'
He added: 'Given that the system of registration is compulsory... it does not seem unjust to impose liability on those who benefit from the system (the public) for harm done by its faulty operation'.